Explained: The liquor scam of ₹2161 cr that rocked Chhattisgarh

Amid the ongoing election in Chhattisgarh, the high-profile liquor scam that ran uninterrupted in the State between 2019 and 2022 has come under the spotlight again.

The scam cost the exchequer a whopping ₹2,161 crores and was operated by high-profile bureaucrats in cahoots with political executives and distillery firms. The year was 2019. It had been less than 6 months since the Congress party formed the government in Chhattisgarh.

A businessman named Anwar Dhebar, who coincidentally happened to be the brother of Congress Mayor (Raipur) Aijaz Dhebar, came up with the idea to defraud the Excise Department of Chhattisgarh.

An IAS officer named Anil Tuteja, who was the Joint Secretary in the Department of Industry and Commerce of Chhattisgarh, also aided in running the syndicate.

How did the Chhattisgarh liquor scam start

Historically speaking, the Department was constituted to regulate the supply and sale of alcohol in the State, generate revenues and prevent hooch tragedies caused due to the sale of illicit liquor.

During the BJP’s tenure, the excise policy of the State was amended and the Chhattisgarh State Marketing Corporation Ltd (CSMCL) was formed in February 2017. Liquor in the State was to be sold from the designated retail stores of CSMCL.

After the Congress came to power, the management of CSMCL was changed. An Indian Trade Service (ITS) officer named Arunpati Tripathi, who is said to be close to Anwar Dhebar, was given the reigns of the State-run entity in February 2019.

Three months later in May, he was made the Managing Director (MD) of the government-run entity.

Illegal commission on alcohol sale

In March 2019, Anwar Dhebar called a meeting of the Directors of three companies ‘M/s Chhattisgarh Distilleries Limited’, ‘M/s Bhatia Wines Merchants Pvt Ltd.’ and ‘M/s Welcome Distilleries Pvt Ltd.’

ITS officer Arunpati Tripathi was also present in the meeting. According to the Enforcement Directorate (ED), the three distillers were asked to pay ₹75 commission for every case of liquor purchased from them by the Chhattisgarh State Marketing Corporation Ltd (CSMCL).

In exchange for this illegal profiteering by Anwar Dhebar, the brother of Congress leader Aijaz Dhebar, the three manufacturers of country liquor were promised ‘proportional lending rates.’ All parties present in the meeting agreed to the arrangement.

As such, liquor cases would be purchased by CSMCL from the three distillers and commissions would be collected (a majority chunk of which was kept by Anwar Dhebar). The pending dues of the country liquor manufacturers would be withheld until they paid their commission.

Sale of illicit liquor

According to the ED, ITS officer Arunpati Tripathi was tasked to ‘maximise bribe commissions.’ The liquor scam mastermind Anwar Dhebar found another way to defraud the Excise Department of Chhattisgarh.

Through his vicious network of hologram manufacturers, bottle makers, manpower management, transporters, illegal distillers, the businessman was able to sell unaccounted, bootleg alcohol from authorised CSMCL retail stores.

As such, it comes as no surprise that the sale of illicit liquor constituted 30-40% of all liquor sold in Chhatisgarh between 2019 and 2022. ITS officer Arunpati Tripathi was given the responsibility of overseeing the sale of non-duty paid liquor from CSMCL stores.

Through his firm ‘M/s Prizm Holography & Films Securities Pvt Ltd,’ Tripathi provided duplicate holograms to Anwar Dhebar. Another accused in the liquor policy scam was Vikas Agarwal, who was tasked with manpower supply through his company ‘M/s Sumeet Facilities Ltd.’

The responsibility of cash collection was given to one Siddharta Singhania, a close aide of Vikas Agarwal, through his ‘M/s Tops Securities’ firm. A man named Arvind Singh provided the logistics, ranging from transportation to supply of duplicate holograms.

As per a report by The Indian Express, about 40 lakh cases of unaccounted country-made liquor were supplied to CSMCL between April 2019 and June 2022. The cases were sold to the public (without any penny going to the State’s coffers) for ₹3,880 per case.

Anwar Dhebar set monthly targets for such unaccounted bootleg alcohol and would communicate the same to the local excise officials through ITS officer Tripathi or Arvind Singh.

Kickbacks from foreign liquor manufacturers

The third mechanism of the liquor policy scam was the extortion of bribes from foreign liquor manufacturers. The Chhattisgarh State Marketing Corporation Ltd (CSMCL), under the watch of Anwar Dhebar, introduced the concept of ‘Fl-10A’ licences in April 2020.

The three distillers (cartels), namely, ‘M/s Chhattisgarh Distilleries Limited’, ‘M/s Bhatia Wines Merchants Pvt Ltd.’ and ‘M/s Welcome Distilleries Pvt Ltd,’ were asked to act as ‘intermediaries’, purchase foreign liquor and sell to the Chhattisgarh government and generate a commission of 10% foreign liquor.

Enforcement Directorate probe and its observations

The investigation by the Enforcement Directorate in the Chhattisgarh liquor scam began in November 2022 based on a complaint by the Income Tax (IT) Department against Anil Tuteja, IAS officer who was part of the syndicate.

The central agency began its probe against him under relevant provisions of the Prevention of Money Laundering Act of 2022. The IT Department had by then seized digital devices and retrieved WhatsApp conversations, which indicated that the corruption was ‘systematic and deep-rooted’.

The ED found that the accused shared ‘daily collection’ details via WhatsApp and maintained Excel sheets of the illegal cash flow. It conducted several raids and unearthed digital proof and incriminating evidence against all accused.

The Enforcement Directorate stated in May 2023 –

“From the investigation done till date, it is clear that massive corruption has occurred in the Excise Department of Chhattisgarh since 2019. The Excise Department was historically set up to regulate the supply of liquor, ensure quality liquor to users to prevent hooch tragedies and to earn revenue for the state. But the criminal syndicate led by Anwar Dhebar turned down all these objectives as they systematically altered liquor policy as per their whims and fancies and extorted maximum personal benefit for themselves.

With the advent of new policy in the state, the CSMCL was incorporated, and it established its own stores to retail the liquor/beer/wine/country liquor after procuring country liquor directly from manufacturers. The shops were supposed to be run by outsourced staff and cash collection was to be done by private vendors/bank representatives.

It was a travesty and irony that this unaccounted liquor was sold from state-run shops. Duplicate holograms were provided. duplicate bottles were procured in cash. Liquor was transported directly from distiller to shops by-passing state warehouses. Excise officials were involved. Manpower was trained to sell unaccounted liquor. Entire sale was done in cash. No income tax, no excise duty were paid. The entire sale was off the books. Entire sale consideration.

With the support of the political executives, Anwar Dhebar managed to get a pliant Commissioner and MD of CSMCL and hired close associates like Vikas Agarwal alias Subbu and Arvind Singh to make the system completely subservient to him.

Chhattisgarh liquor scam: Arrests and aftermath

In May this year, the ED attached properties worth ₹121 crores belonging to Dhebar, Anil Tuteja and Arunpati Tripathi. All of them except IAS Anil Tueteja were eventually arrested. Two others namely, liquor businessman Trilok Singh Dhillon and hotelier Nitesh Purohit, were also apprehended that month.

On July 18 this year, the Supreme Court granted interim bail to Anwar Dhebar, the brother of Congress Mayor (Raipur) Aijaz Dhebar. The apex court also stayed the investigation by the Enforcement Directorate in the Chhattisgarh liquor policy scam.

Last month, the Chhattisgarh High Court rejected the regular bail pleas of Anwar Dhebar, Trilok Singh Dhillon, Nitesh Purohit, and Arunpati Tripath.

“Once we say no coercive steps, does your action not amount to an overreach of our order? Where is the occasion for you to initiate this matter when proceedings are pending before this court,” the Supreme Court warned ED on October 19, 2023.

Featured Image via PTI

The article was first published in OpIndia on November 6, 2023.